A European Commission court upheld an antitrust fine that was imposed three years ago against Lundbeck and four other drug makers for allegedly conspiring to delay the availability of a lower-cost generic version of an antidepressant.
The ruling by the General Court of the European Union came in response to an appeal of a 2013 decision that found Lundbeck and the generic drug makers pursued a pay-to-delay deal that violated European Union anticompetition regulations. The European Commission had fined the companies a total of $165 million with Lundbeck ordered to pay the bulk of the fine, or about $105 million.
The court ruled that the European Commission had correctly established that the agreements eliminated competitive pressure from the generic companies and restricted competition. Moreover, the court decided that Lundbeck was not able to justify why the agreements would have been needed to protect its intellectual property rights, according to a statement by the European Commission.
The case has been closely watched because regulators on both sides of the Atlantic have attempted to crack down on such deals. In pay-to-delay agreements, a brand-name drug maker agrees to settle patent litigation by offering cash or possibly something else of value to a generic company that, in turn, agrees to delay the sale of a copycat version.
Regulators argue these deals are anticompetitive, force consumers to overpay for medicines, and escalate costs to the overall health care system. In the United States, the Federal Trade Commission estimates such deals cost Americans about $3.5 billion annually. Drug makers counter that the deals are not only legal, but allow lower-cost generic drugs to reach consumers faster than if patent litigation continued.
In 2013, however, the US Supreme Court ruled these deals may be subject to antitrust review, but left open to interpretation whether only a cash payment should be considered questionable when a settlement is reached. Since then, branded drug companies have struck far fewer such deals with generic drug makers.
For its part, Lundbeck issued a contentious statement saying it “strongly disagrees” with the decision. The agreements with the other companies “did not restrict competition and did not go beyond the protection already offered by society via Lundbeck’s patent rights … Patent settlement agreements are efficiency-enhancing and legitimate when there are bona fide grounds for dispute.”
Last April, GlaxoSmithKline appealed a $54.5 million fine that was recently levied by United Kingdom regulators for illegally conspiring with several generic rivals to delay marketing of a lower-cost version of its Paxil antidepressant. The generic manufacturers were also fined a total of about $7 million and are appealing those decisions, as well.
Last March, the FTC filed a lawsuit against Endo Pharmaceuticals and three other drug makers for allegedly paying generic rivals to delay launches of copycat versions of two painkillers. This is the first lawsuit, however, in which the agency argues that a deal involving a so-called authorized generic thwarted competition. In such instances, a brand-name drug maker would agree not to sell its own lower-priced version of its medicine, which it might otherwise do to compete with a generic drug maker.